The Supreme Court ordered the Centre and state governments on Tuesday to scrutinize the accounts of lakhs of NGOs and voluntary organisations, which together received thousands of crores of rupees of public funds, and take civil and criminal action against all organisations misusing the grants.
Taking umbrage at years of inaction on the part of governments in seeking accountability from NGOs on fund utilization, a bench comprising Chief Justice J S Khehar, Justice N V Ramana and Justice D Y Chandrachud said: “The governments are not aware of their responsibility to audit the NGOs as provided under the General Finance Rules, 2005.
We direct the respondents to complete the exercise of audit and submit a report to the court by March 31 under all circumstances.” The bench authorised the governments to take punitive action against NGOs and voluntary organisations which failed to provide proper accounts of public funds received by them.
“In case an NGO is found to be non-compliant after auditing, it is imperative for the authorities to initiate civil and criminal action so as to enable the government to recover the money, apart from punishing those who misappropriated the funds,” the bench said.
CBI, through additional solicitor general Tushar Mehta, informed the court that it had so far detected 32.97 lakh registered NGOs and voluntary organizations but less than 10% of them (3.07 lakh) filed their audited accounts with the Registrar of Cooperative Societies. CBI was directed to undertake the NGO fund monitoring exercise on a PIL filed by advocate M L Sharma who had accused Anna Hazare’s NGO of misappropriating funds allotted by Council for Advancement of People’s Action and Rural Technology (Capart). But the court said the problem of NGOs with no accountability seemed to be a much larger issue thanthe Rs 5 crore grant given to Hazare’s NGO.
Amicus curiae Rakesh Dwivedi, with advocate Sansriti Pathak, startled the court by quoting an independent study by Asian Centre for Human Rights (ACHR). Dwivedi said RTI replies collated by ACHR revealed that various departments of the Centre had released Rs 4,756.71 crore as grants to NGOs during 2002-09 and during the same period, states and Union territories had released Rs 1,897.64 crore.